VZCZCXYZ0001
PP RUEHWEB

DE RUEHTV #1972/01 1781038
ZNR UUUUU ZZH
P 271038Z JUN 07
FM AMEMBASSY TEL AVIV
TO RUEHC/SECSTATE WASHDC PRIORITY 1973
RHEHAAA/WHITE HOUSE WASHDC PRIORITY
RHEHNSC/WHITE HOUSE NSC WASHDC PRIORITY
RUEAIIA/CIA WASHDC PRIORITY
RUEKJCS/SECDEF WASHDC PRIORITY
RUEAHQA/HQ USAF WASHINGTON DC PRIORITY
RUEADWD/DA WASHDC PRIORITY
RHMFIUU/CNO WASHINGTON DC PRIORITY
RHEFDIA/DIA WASHINGTON DC PRIORITY
RUEKJCS/JOINT STAFF WASHDC PRIORITY
RUEHAD/AMEMBASSY ABU DHABI PRIORITY 2385
RUEHAS/AMEMBASSY ALGIERS PRIORITY 9103
RUEHAM/AMEMBASSY AMMAN PRIORITY 2414
RUEHAK/AMEMBASSY ANKARA PRIORITY 3194
RUEHLB/AMEMBASSY BEIRUT PRIORITY 2408
RUEHEG/AMEMBASSY CAIRO PRIORITY 0330
RUEHDM/AMEMBASSY DAMASCUS PRIORITY 3146
RUEHLO/AMEMBASSY LONDON PRIORITY 0019
RUEHFR/AMEMBASSY PARIS PRIORITY 0491
RUEHRB/AMEMBASSY RABAT PRIORITY 7086
RUEHRO/AMEMBASSY ROME PRIORITY 4502
RUEHRH/AMEMBASSY RIYADH PRIORITY 9414
RUEHTU/AMEMBASSY TUNIS PRIORITY 3588
RUCNDT/USMISSION USUN NEW YORK PRIORITY 5531
RUEHJM/AMCONSUL JERUSALEM PRIORITY 7249
RHMFISS/CDR USCENTCOM MACDILL AFB FL PRIORITY
RHMFISS/COMSOCEUR VAIHINGEN GE PRIORITY
RHMFIUU/COMSIXTHFLT  PRIORITY

UNCLAS TEL AVIV 001972 
 
SIPDIS 
 
STATE FOR NEA, NEA/IPA, NEA/PPD 
 
WHITE HOUSE FOR PRESS OFFICE, SIT ROOM 
NSC FOR NEA STAFF 
 
SECDEF WASHDC FOR USDP/ASD-PA/ASD-ISA 
HQ USAF FOR XOXX 
DA WASHDC FOR SASA 
JOINT STAFF WASHDC FOR PA 
CDR USCENTCOM MACDILL AFB FL FOR POLAD/USIA ADVISOR 
COMSOCEUR VAIHINGEN GE FOR PAO/POLAD 
COMSIXTHFLT FOR 019 
 
JERUSALEM ALSO ICD 
LONDON ALSO FOR HKANONA AND POL 
PARIS ALSO FOR POL 
ROME FOR MFO 
 
SIPDIS 
E.O. 12958: N/A 
TAGS: OPRC KMDR IS
 
SUBJECT: ISRAEL MEDIA REACTION 
 
-------------------------------- 
SUBJECTS COVERED IN THIS REPORT: 
-------------------------------- 
 
¶1.  Mideast 
 
¶2.  US-Israel Relations 
 
------------------------- 
Key stories in the media: 
------------------------- 
 
The media reported that on Tuesday two Qassam rockets were launched 
at Sderot.  This morning leading electronic media reported on IDF 
operations in the southern Gaza StripQIsrael Radio quoted 
Palestinian sources as saying that 10 Palestinians were killed. 
Electronic media said that in the village of Burkin near Jenin IDF 
troops shot and wounded three Islamic Jihad militants. 
 
Israel Radio quoted a senior GOI source as saying that Hamas is 
trying to create a humanitarian crisis in the Gaza Strip by damaging 
the crossings to Israel.  The radio reported that Assistant 
Secretary of State for Near Eastern Affairs David Welch told PA 
 
SIPDIS 
Chairman [President] Mahmoud Abbas that the US will continue to 
provide the PA with humanitarian aid.  Welch was further quoted as 
saying that US military aid to the PA will be restricted to training 
and implementing measures recommended by US coordinator Lt. Gen. 
Keith Dayton. 
 
Maariv and Israel Radio quoted Egyptian President Hosni Mubarak as 
saying that Israel opposes Egypt sending more troops to stop the 
smuggling of weapons into the Gaza Strip. 
 
Ha'aretz reported that Hamas is willing to be more flexible on its 
list of Palestinian prisoners it wants released in exchange for 
abducted IDF Cpl. Gilad Shalit, according to an Israeli who has been 
serving as the personal liaison to Hamas for Shalit's family. 
Ha'aretz quoted Gershon Baskin, co-director of the Israel-Palestine 
Center for Research and Information, as saying that Ahmed Yousef, 
Hamas PM Ismail Haniyeh's political advisor, told him on Tuesday 
that "Israel should present a new list, of about 1,000 names, and 
Hamas will choose the prisoners [to be released] from it based on 
the agreed number from previous negotiations."  Baskin also sent a 
letter detailing this conversation to Prime Minister Ehud Olmert's 
chief of staff, Yoram Turbowicz.  However, both senior Hamas 
officials and senior Egyptian officials cautioned on Tuesday that 
 
the negotiations over Shalit have been totally frozen for almost 
four weeks, ever since Hamas-Fatah infighting resumed in Gaza, and 
therefore, expectations of an imminent breakthrough are likely to 
prove overly optimistic.  Similarly, President Mubarak was quoted as 
saying in an interview with Yediot that the infighting in the Gaza 
Strip had thwarted a prisoner swap agreed upon in principle -- 
Shalit's release in exchange for 400-500 Palestinian detainees. 
Yediot quoted Israeli political sources as saying that there is a 
new opportunity for a prisoner swap.  Yediot reported that PM 
Olmert's envoy Ofer Dekel recently traveled to Egypt, where he met 
with Egyptian intelligence chief Omar Suleiman and asked for 
clarification on the list of prisoners Hamas was demanding in 
exchange for Shalit.  Jailed Fatah/Tanzim leader Marwan Barghouti 
was quoted as saying in an interview with Maariv that Israel should 
not miss the "golden opportunity" presented by a prisoner swap. 
Barghouti was quoted as saying: "There will be no better time to 
reach an arrangement between us; this is the time for two states for 
two peoples."  The Jerusalem Post quoted senior GOI officials as 
saying on Tuesday that Hamas is feeling intense pressure to 
"deliver" something significant for the Palestinian following their 
violent takeover of Gaza.  Major media (banner in Makor 
Rishon-Hatzofe) reported that on Tuesday Likud Chairman Binyamin 
Netanyahu characterized the release of prisoners as a mistake and 
the crossing of a red line. 
 
Major media quoted Osama Mazini, a member of Hamas's political 
bureau and a liaison with Shalit's kidnappers, as saying in an 
interview with a local Gaza radio station on Tuesday that Shalit 
needs medical care, as the wound he sustained during his abduction 
one year ago has not yet healed. 
 
Ha'aretz cited a special report by the UN's Lebanon Independent 
Border Assessment Team (LIBAT) as saying that the border between 
Syria and Lebanon is highly porous, and that there is no mechanism 
capable of preventing the smuggling of weapons and other materials. 
 
 
Former US Permanent Representative to the UN John Bolton was quoted 
as saying on Tuesday in an interview with The Jerusalem Post that 
sanctions and diplomacy have failed and it may be too late for 
internal opposition to oust Iran's Islamist regime, leaving only 
military intervention to stop Iran's drive to nuclear weapons. 
Worse still, according to Ambassador Bolton, the Bush administration 
does not recognize the urgency of the hour and that the options are 
now limited to regime change from within or a last-resort military 
intervention, and it is still clinging to the dangerous and 
misguided belief that sanctions can be effective.  As a consequence, 
Bolton said he was "very worried" about the well-being of Israel. 
If he were in Israel's predicament, he was quoted as saying, "I 
would be pushing the US very hard.  I am pushing the US 
[administration] very hard, from the outside, in Washington." 
 
Leading media reported that on Tuesday Chairman Abbas outlawed all 
armed Palestinian groups except for the official PA security 
services.  He also issued an order exempting Gaza Strip residents 
from paying taxes.  Ha'aretz reported that Chairman Abbas asked PM 
Olmert at Monday's Sharm el-Sheikh summit to allow the Jordan-based 
Badr Brigade to enter the West Bank.  The newspaper quoted a senior 
Israeli official as saying that Olmert will consider the request. 
 
Ha'aretz and Israel Radio quoted visiting Russian FM Sergey Lavrov 
as saying on Tuesday at a meeting in Tel Aviv with FM Tzipi Livni 
that Russian weapons sales to Syria were subject to strict internal 
controls and complied with all of Russia's international 
commitments.  He was quoted as saying that the sales were completely 
transparent, for defense purposes only, and that they did not alter 
the balance of forces in the region.  The Jerusalem Post quoted 
Lavrov as saying that a Palestinian civil war is in nobody's 
interest. 
 
Leading media quoted officials in Jerusalem as saying that at a 
meeting of Quartet representative in Jerusalem on Tuesday, there was 
disagreement over the appointment of outgoing British PM Tony Blair 
as special Quartet envoy to the Middle East.  The US and UN are in 
favor while Russia and the EU object to the move. 
 
Ha'aretz reported that residents of the West Bank settler outpost of 
Adei Ad began replanting olive trees that they had uprooted last 
week.  The trees were returned to their Palestinian owner, a 
resident of Kafr Karyut, at the insistence of the IDF's Civil 
Administration in the territories. 
 
Israel Radio and other media reported that PM Ehud Olmert is 
delaying the appointment of a finance minister and the reshuffling 
of the coalition government until next week. 
 
The Jerusalem Post reported that US Jewish charities are angered by 
the Israeli Finance Ministry's alleged demands to subsidize 
government programs despite a budget surplus of billions of shekels 
(on Tuesday one shekel was worth USD 0.235 US dollars). 
 
Globes reported that Jewish American billionaire Sheldon Adelson 
will invest USD 200 million in a free Israeli newspaper whose 
distribution will start on July 15. 
 
Maariv reported that the Winograd Commission probing the Second 
Lebanon War will publish its final report in early September or 
early October. 
 
Makor Rishon-Hatzofe cited the London-based newspaper Al-Hayat as 
saying that the US will soon publish a list of sanctions that will 
be imposed on Syrian and Lebanese figures acting against Lebanon's 
stability. 
 
Maariv reported on an Israeli "invention": a movable military 
outpost whose components are carried to hostile territory by a 
helicopter. 
 
Makor Rishon-Hatzofe reported that on Tuesday Iranian President 
Mahmoud Ahmadinejad accused President Mubarak and Jordanian King 
Abdullah II of betraying the Palestinian people.  Maariv reported 
that on Monday Iran will launch an English-language satellite TV 
channel. 
 
The Jerusalem Post reported that on Tuesday the Israel-US Binational 
Research and Development (BIRD) approved investments in 14 new joint 
US-Israel companies, totaling USD 13 million, with a combined budget 
of over USD 36 million. 
 
The Jerusalem Post reported that Hamas intends to ask for changes in 
an agreement with BG Group Plc, giving it a bigger slice of the 
proceeds from a pending natural-gas deal with Israel. 
 
Maariv ran a feature about the Israelis' preferred vacation 
destinations.  The US comes first, followed by Italy, Thailand, and 
Israel. 
 
Ha'aretz and The Jerusalem Post reported that on Tuesday Russian 
billionaire Moshe Kantor, who resides in Switzerland, was elected 
the new European Jewish Congress (EJC) president.  Kantor, who is 
close to Russian President Vladimir Putin, beat the incumbent, 
French businessman Pierre Besnainou. 
 
Ha'aretz reported that on Tuesday the Jerusalem Labor Court rejected 
a request to delay the appointment of Yaki Dayan to the post of 
Israel's Consul General in Los Angeles.  The request was filed by a 
Foreign Ministry employee who competed with Dayan for the post.  The 
disgruntled candidate argued that the appointment was influenced by 
FM Livni, with whom Dayan is closely affiliated.  The court ruled 
that there is no proof that "ulterior motives" were at play in the 
appointment 
 
------------ 
¶1.  Mideast: 
------------ 
 
Summary: 
-------- 
 
The independent, left-leaning Ha'aretz editorialized: "Those who are 
willing to pay any price [in prisoner swaps] are liable soon to find 
themselves facing ever more negotiations and dilemmas of this 
nature." 
 
Op-ed writer Ariella Ringel Hoffman commented in the editorial of 
the mass-circulation, pluralist Yediot Aharonot: "Israeli sourness, 
tightfistedness, and pettiness have never paid off." 
 
Veteran journalist Yaron London wrote in Yediot Aharonot: 
"[Conceding] 'everything' means willingness to summarily yield to 
Hamas's demand and return to the Diaspora." 
 
The conservative, independent Jerusalem Post editorialized: "The 
very fact that Hamas has seen fit to depart from its policy of 
withholding all information on Shalit unless rewarded for it perhaps 
signifies that it may be feeling the pinch of Gaza's isolation." 
 
 
Block Quotes: 
------------- 
 
¶I.  "The Price of the Future" 
 
The independent, left-leaning Ha'aretz editorialized (6/27): 
"Substantively, the [audio] tape [containing a voice message from 
abducted Israeli soldier Gilad Shalit] did not change the 
negotiations.  It had an emotional impact on the Israeli public and, 
via its reflection in the media and public opinion polls, on 
government decision-makers.  But the fundamental issues remain the 
same.  Despite the rhetoric, states maintain a price list.... The 
decision to release 250 prisoners affiliated with Fatah, independent 
of the Shalit deal and before it has even been finalized, was a 
correct one, and it should be followed by other, similar gestures. 
Regarding the Shalit deal itself, Israel must continue to demand 
that the price be lowered.  In principle, the deal is justified if 
there is no military alternative.  But those who are willing to pay 
any price are liable soon to find themselves facing ever more 
negotiations and dilemmas of this nature." 
 
II.  "Time to Change the Mindset" 
 
Op-ed writer Ariella Ringel Hoffman commented in the editorial of 
the mass-circulation, pluralist Yediot Aharonot (6/27): "It cannot 
be guaranteed that if Israel had upheld the agreement with 
[Hizbullah], as Nasrallah understood it, the kidnappings would not 
have been prevented; but it can be said with confidence that it was 
worthwhile to try.  The last kidnapping, as we recall, led to a war. 
 In other words, Israeli sourness, tightfistedness, and pettiness 
have never paid off.  A prisoner exchange many not be a cause for 
celebration by the establishment, certainly not a sign of Israel's 
successes, but it is great joy for the parents on both sides.  And 
in the absence of any other choice, this is a great deal." 
 
III.  "Not 'At Any Price'" 
 
Veteran journalist Yaron London wrote in Yediot Aharonot (6/27): "We 
cannot give 'everything' in return for out kidnapped soldiers. 
'Everything' means willingness to summarily yield to Hamas's demand 
and return to the Diaspora..... One on hand stands the suffering of 
the kidnapped soldiers and the grief of their family, and on the 
other stands the suffering of the thousands of victims of terror and 
the expected suffering of those who stand to be attacked by the 
determined terrorists who will be released from prison." 
 
IV.  "Hamas's Blackmail" 
 
The conservative, independent Jerusalem Post editorialized (6/27): 
"Gilad Shalit's abductors are well aware that Israel is the sole 
liberal democracy in a sea of autocratic Arab regimes.  They know 
that Israel adheres to a very different set of values from their own 
death cult, that Israel makes the preservation of life its highest 
consideration.  The upshot is that whenever our enemies hold an 
Israeli for ransom, they expect his country to go out of its way to 
pay for his freedom, even if the price is disproportionate and even 
if it, down the line, endangers the lives of other Israelis -- both 
in uniform and civilians.  The more Israel pays, the more 
kidnappings are seen to pay off.... This human Israeli mindset, 
terribly, yet again plays into Hamas's hands, abetting its 
psychological warfare, increasing its leverage.  Still, the very 
fact that Hamas has seen fit to depart from its policy of 
withholding all information on Shalit unless rewarded for it perhaps 
signifies that it may be feeling the pinch of Gaza's isolation." 
 
------------------------ 
¶2.  US-Israel Relations: 
------------------------ 
 
Summary: 
-------- 
 
Washington correspondent Shmuel Rosner wrote in the independent, 
left-leaning Ha'aretz: "It seems that after 10 years of relative 
quiet during which the Republicans controlled Congress, there is a 
growing tendency to use Israel as a pawn on the political playing 
field." 
 
Block Quotes: 
------------- 
 
"The Price of the Future" 
 
Washington correspondent Shmuel Rosner wrote in the independent, 
left-leaning Ha'aretz (6/27): "Just as every political choice 
inevitably reflects an order of priorities, it is possible to argue 
today -- with a certain amount of justice -- that the [US] 
Republican Party prefers to prevent the distribution of condoms in 
third-world countries over supporting defense aid to Israel.  All 
the rest is excuses..... Republican offices hastened this week to 
explain: had they thought that because of them aid to Israel would 
be revoked, they would have voted otherwise [on a bill reviving the 
'Mexico City policy' denying aid to organizations or institutions 
that work for abortion].... Nevertheless, it seems that after 10 
years of relative quiet during which the Republicans controlled 
Congress, there is a growing tendency to use Israel as a pawn on the 
political playing field.  And there seems to be no chance of 
stopping this process.  As the Bush era draws to a close, all means 
are kosher in Washington's power struggles.  That is how officials 
in Jerusalem explained the surprising visit to Damascus by Speaker 
of the House Nancy Pelosi, a Democrat, and how some of them view the 
thorn that Lowey stuck in the sides of legislators from the minority 
party.  And there will probably be additional snags of this nature. 
Or, as one Israeli source put it, the naked truth has been revealed: 
It must be hoped that no African wombs ever stand between us and 
American aid in the future." 
 
JONES